Let’s Look at Discovery in Divorce
In a divorce proceeding, the parties must exchange with each other and file with the court a sworn statement of net worth (snw). This is a document signed under oath setting forth your expenses, income, assets and liabilities. It is a document that you could easily help someone else fill in, yet for some reason, when you have to fill it in for yourself, we all get severely perplexed. Along with this, the following documents are supposed to be attached to the snw and exchanged as well: last filed income tax returns with all schedules and all back up documents (i.e., W-2, 1099, K-1, etc.); recent pay stub if it shows year to date, otherwise all pay stubs for the year; all account statements for the past 3 years for any and all accounts, i.e. bank, deferred comp, stock, investment, retirement, life insurance policy etc.; a copy of your retainer agreement with your attorney. Any delay in this is a delay in your case and a possible negative inference against you.
Do not lie or omit anything. If it is later found out that you lied, it will bite you big time in the butt. You entire credibility will be questioned as to everything else as well. If not found out during the divorce but found out later, you can be sued based on fraud and misrepresentation to reopen the divorce for your spouse to get his or her share. You can also be found guilty of committing perjury.
A Preliminary Conference (PC) is held, and the case is road mapped as to when each aspect of discovery will be completed. It also sets forth all the issues that are and are not resolved both pending the divorce and post divorce.
Further documents and financial information is later elicited by service of discovery demands (i.e., Notice for Discovery and Inspection, Combined Demand, Interrogatories), and next will be depositions. All of this is scheduled during the PC. This is all to find possible hidden assets, be sure and certain of assets and debts, and get the case ready to be settled or for trial. But as well, often forensic accountants are utilized to determine business values, earning capacities, enhanced earning amounts, appreciation of values during marriage and more. Specialists are used to value pension plans, because the real value and the statement value are not always the same especially when it is a true pension plan and not a bank account type such as a 401(k). Real estate appraisers are also used.
Nothing that is financial is exempt from discovery unless neither party’s name was ever on it, but then there may be exceptions, such as if it is suspected funds were being funneled into someone else’s name to hide them. Or the assets was purchased with marital funds but placed in someone else’s name to hide it.
Best advice: Always be up front and forth coming. Show everything, hide nothing. Provide it all ASAP or sooner. This will help avoid being in the middle of expensive discovery motion practice where odds are you will be told by the judge to produce it.